Former Yugoslav Republic of Macedonia Country Brief
Bilateral relations
Australia recognised the former Yugoslav Republic of Macedonia
on 15 February 1994, using the nomenclature the former Yugoslav
Republic of Macedonia in accordance with the terminology used by
the United Nations (UN). Australia and the former Yugoslav Republic
of Macedonia agreed to establish diplomatic relations on 20 October
1995. The Australian Ambassador is resident in Belgrade and an
Australian Honorary Consul was appointed in Skopje in May 1998.
The 2006 Census recorded 83,978 people of former Yugoslav Republic
of Macedonia ancestry in Australia. A large dual-national
community also lives in the former Yugoslav Republic of Macedonia,
predominantly in the town of Bitola.
In May 2005, Dr Ilinka Mitreva, then Foreign Minister for the former Yugoslav Republic of Macedonia, visited Australia as a Guest of Government.
Bilateral trade and investment
In 2006-07 Australian exports to the former Yugoslav Republic of Macedonia were valued at A$2.04 million, with imports at A$3.58 million. In 2006-07, games and sporting goods continued to be Australia’s largest export commodity. Food products comprise the majority of imports to Australia, in particular, preserved vegetables. Though investment levels are low, there is increasing interest by Australian companies in investing in the insurance (QBE), tourism (and related services), and information technology (including banking software) sectors.
General background
The former Yugoslav Republic of Macedonia is a landlocked and mountainous country with an area of 25,713 square kilometres (less than half the size of Tasmania). Of the population of 2.1 million, approximately two-thirds are ethnic Macedonians, one quarter Albanians (concentrated in the north-western parts of the country) and there are significant minorities of Turks, Serbs and Roma. Located in the centre of the Balkan Peninsula, the former Yugoslav Republic of Macedonia has borders with Albania in the west, Greece in the south, Bulgaria in the east and Serbia (including Kosovo) in the north.
Political overview
The former Yugoslav Republic of Macedonia declared its independence from the former Socialist Federal Republic of Yugoslavia (SFRY) on 17 September 1991.
The President is elected by majority vote in direct elections, for a term of five years. No person may serve more than two terms as President. The President is the head of state, Commander-in-Chief of the Armed Forces of Macedonia and Chair of the National Security Council. Mr Branko Crvenkovski was elected President of the former Yugoslav Republic of Macedonia on 28 April 2004 in the Republic’s third Presidential elections since 1991.
The Cabinet or Council of Ministers is elected by majority vote in the Sobranje (the unicameral assembly), which is made up of 120 seats. 85 members are elected by direct popular vote and 35 from lists of candidates submitted by the parties based on the percentage gained from the overall vote. All members serve four-year terms. The Assembly sits in Skopje and its powers include amending the constitution, passing laws and resolutions and ratifying international agreements.
On 5 July 2006 the centre-right party VMRO-DPMNE led by Nikola Gruevski won the parliamentary elections from the previously governing coalition of SDSM/DUI. A five-party coalition was eventually formed, it includes the Democratic Party of Albanians (DPA), one of the country’s two main ethnic Albanian parties. Prime Minister Gruevski has set out an ambitious program of economic development and political reform.
Internal Relations
In January 2001, tension between the ethnic Macedonian and ethnic Albanian communities led to a civil conflict between the hitherto unknown Albanian NLA (National Liberation Army) - which had strong ties with the Kosovo KLA/UCK (Kosovo Liberation Army / Ushtria Clirimtare E Kosoves) - and the former Yugoslav Republic of Macedonia security forces. The political crisis led to several outbreaks of armed fighting, particularly in the northwest, and lead to the internal displacement of thousands of citizens.
Since agreement on the issues of minority rights and representation reached in August 2001 under the ‘Ohrid Agreement’ the necessary legislative changes have passed through the parliament and practical implementation is underway. In early 2003, the former Yugoslav Republic of Macedonia government formed a ministerial committee to carry out an action plan to deliver enhanced Albanian representation in state institutions.
NATO maintains headquarters in Skopje, and advises the former Yugoslav Republic of Macedonia Government on security sector reform.
Relations with its neighbours
Relations with the EU and NATO
A key foreign policy objective for the former Yugoslav Republic of Macedonia is to become fully integrated in Euro-Atlantic structures through membership of the EU and NATO.
Negotiations commenced in March 2000 with the EU to conclude a Stabilisation and Association Agreement (SAA), the first major step towards membership of the EU. The SAA was signed in April the following year and Skopje is working closely with the EU to develop and strengthen the former Yugoslav Republic of Macedonia’s institutions and capacity to meet the requirements for accession. The former Yugoslav Republic of Macedonia became an official EU candidate country in late 2005, and hopes to join the EU by 2015.
The former Yugoslav Republic of Macedonia has also sought membership of NATO, signing the Partnership for Peace (PfP) Framework Document in November 1995. Through the PfP, partner countries develop individual programmes of practical cooperation with NATO. The basic aims of PfP are to promote transparency in national defence planning and military budgeting; promote the democratic control of national armed forces; and develop the capacity for joint action between forces from Partner countries and those of NATO member countries, for example, in peacekeeping or disaster-response operations. Recently, the former Yugoslav Republic of Macedonia has contributed military support for allied efforts in Afghanistan and post-conflict Iraq.
Relations with Greece
Relations with Greece have improved significantly during the last few years, particularly in relation to trade and investment. However, both continue to disagree over the ‘name issue,’ whereby the former Yugoslav Republic of Macedonia refers to itself as the ‘Republic of Macedonia’, but Greece considers this implies territorial aspirations to northern parts of Greece. The former Yugoslav Republic of Macedonia was admitted to the UN in 1993 with the compromise name of the former Yugoslav Republic of Macedonia.
Economic overview
The former Yugoslav Republic of Macedonia is one of the poorest countries in Europe. Its economy was essentially dependent on the markets of the other republics of the former Socialist Federal Republic of Yugoslavia, the disruption of which dealt a heavy blow to economic activity in all countries in the region. These problems were exacerbated in the first half of the nineties by the impact of other markets in Eastern Europe undergoing restructuring, the difficulties of economic transition, UN sanctions, and a Greek embargo. The end of the Greek embargo in October 1995 and the lifting of UN sanctions created a more normal economic environment. However, the 2001 conflict seriously affected production, foreign investment and the pace of economic reform. Real GDP growth fell to minus 4.5 percent in 2001, average consumer price inflation stood at 5.5 percent. Average GDP per capita was estimated at $8,300 in 2006.
The former Yugoslav Republic of Macedonia was admitted as a full member of the WTO in September 2002. It was admitted as a member of the Central European Free Trade Agreement (CEFTA) in 2006.
Economists estimated a real GDP growth of 3.1 per cent in 2006 and expect a real GDP growth of 4 per cent in 2007-08. The current account balance was estimated to be 1.3 percent of GDP in 2006. In 2007, the current account balance is expected to increase further.
In 2006, consumer price inflation reached 3.2 per cent. In 2007 inflation is expected to fall to 2.8 per cent and again to 2.4 per cent in 2008. The forecasted decrease will be due in part to tight economic policy and the relative stability of the denar.
Unemployment is currently at 36 per cent. Unemployment is not expected to fall appreciably in the short term, even if a revival in growth is achieved.
Last updated: 5/12/2007